COVID-19 policy and measures have caused both negative and positive challenges for the transport sector. The aim of the research is to model an impact of shocks that transport and logistics encounter during the COVID-19 era on the economy and regional development. A comparative-static approach that involves an input-output model with additional regional modelling block and scenarios are applied. Two scenarios are estimated for Latvia’s economy: firstly, extremely dramatic decline in demand on air transport services by 90%; secondly, unexpected increase in demand for postal and courier services that doubled output. The results of the first scenario argue that the service sector is influenced more than manufacturing due to air transport collapse –rental and leasing services (-11.6%), employment services (-9.7%), other transport services (-7.0%), impact on manufacturing is relatively minor and only on certain branches. The results of the second scenario on doubled output in postal and courier services argue that there is a positive impact, but the scale is relatively low, the most affected industries are manufacturing (of paper products (increase by 1.7%), rubber and plastic goods (1.6%)). The findings confirm that the urban areas due to higher economic activity and larger service sector are more affected to the modelled shocks both negative and positive. The rural areas are relatively less negatively affected during the crisis, but at the same time, during the recovery (for example, in the post-COVID era) it may lead to weaker economic activity and the rural areas will continue to lag behind urban areas.

The paper covers analysis of high-tech industry development in Latvia, as well as its facilitating and restricting factors. High-tech industries become more important in Latvia both in terms of export share and generated value added; also the number of enterprises and employees is increasing. A stable political system, enabling business environment, a relatively low corporate income tax rate, and government aid are considered as some of the most important facilitating factors. The paper emphasizes the government’s role in promoting and developing the high-tech manufacturing. The most significant limitations are the lack of skilled specialists and sophisticated real estate space, and the remote industrial supply companies and the service centres. Recommendations are given on the possible development directions, including improvements in manufacturing infrastructure, enhancements of the skill level of the labour force, and bringing up a new generation of entrepreneurs.

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Competitiveness is the key factor in order to reach the economic transformation, smart growth, governance and legal framework for the state and society for sustainable development that are stated as the major goals in the current planning period in Latvia. High-technology industries are the main drivers of economic activity in developed economies. To ensure data comparability, the official definition of the high-technology industries by Eurostat is applied in this research including two industries: manufacture of basic pharmaceutical products and pharmaceutical preparations and manufacture of computer, electronic and optical products. The research aims to analyse high-technology industries in Latvia taking into account the competitiveness and the regional allocation using a set of several indicators. According to NUTS 3, Latvia is subdivided into 6 regions; however, the high-technology industries are regionally allocated mainly in two regions, Riga and Pieriga regions. Manufacture of basic pharmaceutical products etc. employs 99% of employees in these two regions, manufacture of computer etc. products-81% despite the fact that only 54% of employees reside in these two regions. The research confirms that the high-technology regional allocation depends on available labour resources and also education and professional training facilities in the region. We conclude that the high-technology industries are competitive in the global market as the share of the high-tech products in total exports is several times higher than the share of these industries in the manufacturing sector or in total economy. The global competitiveness of Latvia's high-tech industries is stable and gradually rising.

Abstract. The paper is devoted to the analysis of the exports and competitiveness in the Baltic States from the trade in value added perspective. The main objective is to determine the differences in export patterns measured in gross terms and in value added terms and the implications on competitiveness. Focusing on the recent trend to facilitate high value added exports, the article describes high-and medium-high-tech industries as classified by the EUROSTAT in more detail. OECD database is used for the study purposes, data are analysed using different statistical methods, including the calculation of relative indicators and regression analysis. The results show that Lithuania seems to be more competitive Baltic Country in general terms, but Latvia is lagging behind in the sector of high-and medium-high-tech industries.